World economy witnessing ‘cheerful spring’: Lagarde

The International Monetary Fund (IMF) chief Christine Lagarde said the world economy is witnessing a cheerful “spring”, but warned “sword of protectionism” would overshadow trade outlook.

After six years of “disappointing” growth, the world economy is gaining momentum, Lagarde said on Wednesday while addresing an event organised by Brussels-based think tank Bruegel.

According to the IMF chief, for advanced economies, the outlook had improved with stronger manufacturing activity, this upswing was broad-based across countries, including in Europe, although some countries still faced high debt and weaknesses in some banks, Xinhua news agency reported.

The prospects for emerging and developing economies also boded well for global growth, Lagarde said, adding that they have driven the global recovery in recent years and would continue to contribute more than three-quarters of global gross domestic product (GDP) growth in 2017.

“We see a global economy that has a spring in its step, benefiting from sound policy choices in many countries in recent years,” Lagarde said.

Her remarks came a few days ahead of the IMF’s scheduled release of world economic outlook as well as the Fund’s spring meeting when finance ministers and central bankers were expected to meet and discuss world economy in Washington.

“At the same time, there are clear downside risks,” Lagarde warned.

“Restricting trade would be a ‘self-inflicted wound’ that disrupts supply chains, hurts global output, and inflates the prices of production materials and consumer goods,” she added.

The IMF chief urged joint efforts to bolster global trade as it promoted innovation-sharing and encouraged firms to invest in new technologies and more efficient business practices.

“Let’s build a more resilient and inclusive global economy with sound policies and strong international cooperation,” she added.